A Look At What Has Transpired

So let’s take a look at what has been going on with the blowout preventers. It’s being reported that federal regulators warned offshore rig operators more than a decade ago that they needed to install backup systems to control these giant undersea valves known as blowout preventers, which are used to cut off the flow of oil from a well in an emergency. The blowout preventers (BOP), which can weigh up to 640,000 pounds, guard the mouths of wells. The BOPs are to be the last defense to choke off unintended releases, slamming a gushing pipe with up to 1 million pounds of force.

These warnings were repeated in 2004 and 2009. Yet the MMS, which is charged with regulating the oil industry and collecting royalties from it, never took steps to address the issue comprehensively. Instead, MMS relied on industry assurances that the oil companies were on top of the problem. In addition to the Corporate Crime Reporter information, there were numerous warning signals that apparently were ignored by MMS and the oil industry. Numerous blowout preventers and their control systems have failed over the years, though none as catastrophically as those on the well the Deepwater Horizon drilling rig was preparing when it blew up on April 20th. MMS records show that from 2001 to 2007, there were 1,443 serious drilling accidents in offshore operations, leading to 41 deaths, 302 injuries and 356 oil spills. Yet the federal agency continued to allow the industry largely to police itself. That’s an obvious recipe for disaster.

Last year, BP teamed with other offshore operators to oppose a proposed rule that would have required stricter safety and environmental standards and more frequent inspections. At that time, BP said “extensive, prescriptive” regulations were not needed for offshore drilling, and the oil giant urged MMS to allow operators to define the steps they would take to ensure safety largely on their own. That is unbelievable and can’t be justified.

In the absence of government regulations, all 23 of the oil drilling rigs currently working in the Gulf of Mexico rely on a backup device known as a remotely controlled submersible vehicle to turn on the blowout preventers if primary controls fail. That was the case with the Deepwater Horizon rig as well. But a consultant hired by the MMS in 2003 warned that these machines were frequently unreliable during blowouts, moving too slowly and often lacking power to do the job. The New York Times reported in an article:

Even worse, the same consultant concluded in a federally financed study that even if rig crews managed to turn the blowout preventer on, the most critical safety component inside these machines — the shear ram, which is meant to cut quickly through the well pipe to stop the flow of oil and gas — was often not strong enough to cut through the modern pipes that drilling rigs use. “This grim snapshot illustrates the lack of preparedness in the industry to shear and seal a well with the last line of defense against a blowout,” according to the September 2004 report, written by West Engineering.

Transocean, the company that operated the Deepwater Horizon rig for BP, has been cited twice in recent years by the authorities in Britain for failing to properly maintain a blowout preventer and related testing equipment on an offshore drill site there, with officials saying in November 2006 that the device “failed in service, exposing persons to risks that endangered their safety.” All told, the explosion on April 20th and the massive oil spill that resulted was an accident waiting to happen!

BP in a massive public relations campaign has been boasting about the cost of its efforts so far. But, it should be noted that BP’s daily profits dwarf the daily cost of spill response, and at the current rate, the company could cover the entire cost of cleanup thus far in just under four days of profits. BP’s “prodigious costs” combating the oil spill in the Gulf are outweighed by its “prodigious profits.” In the first quarter of the year, the London-based oil giant’s profits averaged $93 million a day. Yes, that’s correct – $93 million a day. The amount of oil leaking into the Gulf of Mexico has been estimated at 5,000 to 25,000 barrels a day. In the first quarter, BP produced 2.5 million barrels of crude oil a day worldwide — and it received $71.86 for every barrel. At $93 million a day in profits, BP makes $350 million in about 3.8 days. The Washington Post noted that Exxon, because of a very friendly decision by the U.S. Supreme Court, was able to pay only $507.5 million of the original $5 billion in punitive damages that it had been assessed for the 1989 Valdez disaster.